Federal officials allege that the marijuana retailer was involved in interstate cannabis distribution and sales, as well as a credit card scheme from which profits were used to finance cannabis grow operations. Media reports said the raid was conducted after an eighteen-month long investigation.

Advertisement

Ararat Manukyan, CCC co-owner Yeghishe Nazaryan, and Gevorg Tashchyan were arrested and are expected to appear in front of a U.S. magistrate judge on Wednesday. A total of nine individuals face fraud and conspiracy charges, including Mariam Gevorkova, Lilit Gevorkova, Akmaljon Radjapov, Shokhrukh Tashpulatov, Davit Sukiasyan, and Gevorg Tashchyan.

The U.S. Attorney’s Office for Oregon explained the alleged credit card “bust out” scheme in a statement and said:

“A credit card ‘bust-out’ is a fraud scheme that begins with perpetrators obtaining credit cards and accumulating large balances. Payments are then made from co-conspirator bank accounts, reducing the credit card balances and allowing for additional purchases. After numerous purchases and payments are made, a co-conspirator would report the payments as unauthorized to their banks. Banks then seek and obtain reimbursement from the credit card companies and deposit those funds back into the co-conspirator’s bank accounts. No further payments are made on the credit cards, resulting in losses to those institutions that often exceed a card’s spending limit.”

Defendants had allegedly defrauded financial institutions of more than $1 million with the bust-out scheme, the statement said further.

The raid comes after U.S. Attorney Billy J. Williams at the end of May issued a memo outlining increased enforcement by federal officials.